Washington, Jan 31(Agencies): In the fourth quarter, an optimistic Chrysler has narrowed its net loss significantly as it continued a comeback from bankruptcy protection. Chrysler predicted it would make $200 million to $500 million this year, setting the stage for an initial public stock offering that could take place in the fourth quarter.

The US government gave Chrysler $12.5 billion to get through bankruptcy in 2009. In exchange, the government got a 10 percent stake in the company. Chrysler, which is controlled by Italy's Fiat Group SpA, still must repay $5.8 billion on the loans, and the government hopes to get the rest of its money back in the stock sale.

Chrysler, which has not turned a quarterly profit since leaving bankruptcy, said Monday that it lost $199 million from October through December, far better than the $2.7 billion it lost during the same period of 2009.

Karl Brauer, senior analyst for the Edmunds.com automotive website, said 16 new or revamped models, many of which hit showrooms toward the end of last year, have given the company momentum to back its prediction of turning a profit.
For the full year in 2010, Chrysler lost $652 million, compared with a staggering $8 billion loss in 2009 when it would have run out of cash without government help.

There were some troubling signs in the fourth quarter, though. Chrysler had been cutting its losses during the first three quarters of the year, but the fourth-quarter loss was more than double the $84 million it lost in the third quarter. Revenue for the quarter also dropped, falling 2 percent from the third quarter to $10.8 billion.

On an operating basis, excluding interest and taxes, Chrysler made $198 million from October through December, but that was $41 million less than it made in the third quarter. Global sales also were down 7 percent.